The return from Thanksgiving holiday has been tough for advocates of whistleblower protections and common sense financial regulation. Last week, the Supreme Court heard Digital Realty Trust v. Somers, which concerned whistleblower protections under the Dodd-Frank Act. The Court appears poised to eviscerate internal whistleblower protections, as the justices seemed sympathetic to Digital’s argument that whistleblowers must report alleged misconduct to the Securities and Exchange Commission (SEC) to avail themselves of anti-retaliation protections. As the National Whistleblower Center explained in its highly-praised brief, both foundational rules of statutory construction and pragmatic policy concerns should push the Court to rule in favor of the whistleblower. Unfortunately, Supreme Court watchers are currently predicting the opposite: a unanimous decision against whistleblower protections. Continue Reading CFTC Expanding Whistleblower Program
This term the U.S. Supreme Court will decide Digital Realty Trust v. Somers (Digital), one of the most important whistleblower cases to come before the Court in 20-years. The Chamber of Commerce and its Wall Street allies want to strip all employees who report securities frauds internally to their compliance departments or managers from protection under the Dodd-Frank Act’s (DFA) whistleblower law. Continue Reading Thousands of Whistleblower Cases in Jeopardy
Corporate Attack on Internal Whistleblowers Rebutted
In an article published on June 22, 2017, by Law360, Stephen M. Kohn, executive director of the National Whistleblower Center (NWC) and partner in the whistleblower rights law firm of Kohn, Kohn and Colapinto, revealed previously unknown information regarding the legislative history of the anti-retaliation language in the Dodd-Frank Act (Dodd-Frank). A controversy exists regarding these provisions which has resulted in a split in the U.S. Courts of Appeal interpreting the scope of protected activity. Continue Reading NWC Statement Clarifies History Behind Dodd-Frank Anti-Retaliation Provisions
Washington, DC, November 16, 2016. The Securities and Exchange Commission (SEC) Whistleblower Program had its most successful year to date in 2016. The agency, which issued its annual report to Congress today, reports it issued awards totaling over $57 million in 2016—higher than all award amounts issued in previous years combined. The Office of the Whistleblower (OWB) received over 4,200 tips this year, which is a more than 40 percent increase in whistleblower tips since 2012. In addition, the SEC took action in its first ever stand-alone whistleblower retaliation case.
Washington, D.C. October 12, 2016. The Securities and Commodities Exchange(SEC) announced yesterday that fiscal year 2016, which ended on September 30, 2016, was a record year for SEC enforcement. The agency reached new highs in enforcement in all areas, especially for whistleblowers. Continue Reading SEC Announces Record Year Standing Up for Whistleblowers
Washington D.C. October 9, 2016. Och-Ziff Capital Management Group (Och-Ziff), A New York-based alternative investment and hedge fund manager, agreed to pay a combined total amount of U.S. criminal and regulatory penalties of approximately $412 million to settle charges it violated the Foreign Corrupt Practices Act. In separate announcements yesterday the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) each described the actions of Och-Ziff which led to the charges the company violated the FCPA. Continue Reading Och-Ziff Hedge Fund Pays Over $400 Million to Settle Foreign Bribery Charges
The Securities and Exchange Commission (SEC) announced that Jane Norberg will now head its whistleblower office. The SEC Office of the Whistleblower reviews whistleblower tips, evaluates whistleblower award claims, and makes recommendations on whether claimants should receive an award for their information. Ms. Norberg has served as acting chief since the departure of Sean McKessy in July. Continue Reading New Chief of SEC Whistleblower Office Named
The Securities and Exchange Commission (SEC) announced August 30, 2016 that it has awarded over $100 million to whistleblowers since its inception in 2011. The SEC’s whistleblower program was established by Congress to incentivize whistleblowers with specific, timely and credible information about federal securities law violations to report to the SEC.
The U.S. Commodity Futures Trading Commission (CFTC) announced today that it is requesting public comment on proposed amendments to the Whistleblower Rules found in Part 165 of the CFTC’s Regulations. The CFTC announcement states:
“The amendments would enhance the process for reviewing whistleblower claims and make related changes to clarify staff authority to administer the whistleblower program. The proposal will also strengthen the CFTC’s anti-retaliation authority to provide whistleblowers protection from retaliation through CFTC enforcement action under the Commodity Exchange Act (CEA). Continue Reading CFTC Asks for Public Comments on Whistleblower Rule Changes
There are more effective ways to protest lax enforcement of financial fraud
Last week, it was widely reported that Eric Ben-Artzi, a Deutsche Bank whistleblower stated he will refuse a portion of his whistleblower award from the U.S. Securities and Exchange Commission’s whistleblower program. Mr. Ben-Artzi had worked at the bank as a vice president and he tells an all too-familiar story of a loyal corporate insider reporting serious fraud internally only to be betrayed by corporate compliance officials and then getting fired by management.
Mr. Ben-Artzi next reported the wrongdoing to the SEC and later formally asked the SEC in 2015 to grant him a monetary award for helping the SEC to fine Deutsche Bank. After being awarded more than $8 million he says he will refuse to accept a portion of that whistleblower award (but allow his ex-wife and attorney to collect a portion of his share) as a form of protest to the SEC’s collusion with Wall Street.
However, refusing the award makes little sense, because there are more effective ways the whistleblower can protest lax enforcement and corporate fraud. Continue Reading Deutsche Bank Whistleblower Should Accept SEC Whistleblower Award